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Saturday, March 2, 2013

Diners feeling the staff crunch

The dining experience has been marred by poorer service and higher food prices brought on by the manpower crunch in the food and beverage industry

By Rebecca Lynne Tan

Modern Singaporean restaurant Wok & Barrel will be shutting its doors for good next Sunday.

The main reason for its closure is one that ripples through the food and beverage industry: a shortage of manpower.

Staff would routinely not show up for work at Ms Shen Tan's 50-seat restaurant in Duxton Hill.

The manpower issue, coupled with other factors such as rising costs of labour and rental, has led her to call it quits.

Last December, two of her four full-time staff resigned, leaving her with just one cook in the kitchen and another running the front of house operations. Part-time service crew who did not turn up for work did not help matters either.

To cope, she would double as cook and server almost every day, running to and from the kitchen.

Ms Tan, 40, says: "I feel bad for the customer but I can't do anything about it if someone doesn't turn up for work. I am frustrated that I can't meet diners' expectations of service."

A busy night at the restaurant can look like this: irate customers waving frantically for their orders to be taken, dirty plates waiting to be cleared and empty glasses in need of topping up.

This is a common scene at many other restaurants here.

Diners who do not understand the situation become angsty and annoyed. Some even end up leaving the restaurant because of the lack of service.

The rising costs of manpower, rental and raw ingredients are also translating to higher menu prices.

While the labour crunch is perhaps the biggest headache, businesses are also grappling with increasing rents in land-scarce Singapore and paying more for ingredients, which cost more because of increasing freight charges and scarcity brought on by natural disasters, among other factors.

Restaurants bear the majority of these costs. In some instances, about 5 to 10 per cent is passed on to consumers through price increases.

Also, the fewer the number of staff, the lower the productivity, which also means restaurants do not turn tables as quickly as they would like to.

The result is worsening dining experiences and pricier meals for customers.

Restaurants that cannot cope with the labour shortage then close as a last resort.

And Ms Tan's restaurant is not the only casualty.

Others, such as Japanese restaurant group RE&S, and the TungLok Group, which runs mostly Chinese restaurants, have had to close some of their eateries because of the lack of manpower.

TungLok Group, for example, closed its Lao Beijing outlet at Tiong Bahru Plaza last December due to a "severe manpower shortage".

Singapore's food scene is becoming increasingly vibrant, with a growing number of restaurants and food and beverage outlets here.

But restaurateurs say the industry has never seen worse times.

The lack of staff, as well as the Ministry of Manpower's tightening of foreign worker dependency ratio ceilings from 50 to 45 per cent, are making it tougher for restaurants to operate.

A check with 15 restaurants and restaurant groups found that they need between 10 and 40 per cent more staff to function optimally.

According to the most recent economic survey on F&B services by the Department of Statistics released earlier this month, Singapore had 2,317 restaurants in 2011, which employed 43,500 workers in 2011.

And still, more workers are needed to fill jobs in this sector.

Restaurateurs whom SundayLife! spoke to also need additional staff to operate new restaurants they plan to open this year.

These were planned for and committed to in 2011 and early last year, before the manpower situation worsened in the middle of last year.

Figures from the Accounting and Corporate Regulatory Authority show that 686 restaurants were set up last year, which translates to an average of just under two restaurant openings a day.

A total of 537 restaurants closed last year, which equates to a nett increase of 149 restaurants last year, more than double the increase in 2011.

Together, the restaurateurs whom SundayLife! spoke to say they plan to open 30 more restaurants this year.

For example, Crystal Jade Culinary Concepts will be opening four restaurants this year and is looking to hire 150 more staff.

The Paradise Group, behind restaurants such as Canton Paradise and Paradise Inn, has five new restaurant openings this year and will need another 100 or so employees.

Meanwhile, hotelier-restaurateur Loh Lik Peng, whose restaurants include Pollen and Esquina, needs at least another 25 service and kitchen staff for his two new restaurants, slated to open in the next few months.

The Deliciae Hospitality Management Group, behind restaurants such as &Made and Sabio, will be opening three restaurants at the revamped Suntec City Mall later this year and will require another 80 staff.

But the overall annual average unemployment rate remained at a low of 2 per cent last year.

Restaurateurs say it is a case of too many jobs and not enough eligible applicants, as restaurants must first hire Singaporeans workers before they can employ foreigners, in order to meet quotas.

New Manpower Ministry measures took effect last July to regulate Singapore's increasing dependence on foreign manpower.

The tighter dependency ratio means that a company with 10 local workers, which could previously hire up to 10 foreign workers, now has to cut its foreign workforce by two if it retains 10 local workers.

Companies have been given a "transition period" until June next year to comply with the new regulations.

But currently, companies which hire new foreign workers will not be allowed to exceed the new dependency ratio ceiling.

The manpower crunch and more stringent government regulations are forcing restaurateurs to think twice about growing their restaurant businesses here, restaurateurs say.

Of the F&B groups SundayLife! spoke to, many are opening fewer outlets even though there are good opportunities.

Others are halting expansion plans here altogether and are instead looking to overseas markets, where labour is more accessible.

A common thread among restaurateurs is this: They do not want to compromise their customers' dining experience due to a lack of staff.

But sometimes, it cannot be helped.

POORER SERVICE

The noticeable lack of staff at restaurants - both local and foreign - is frustrating, diners say.

One exasperated diner who had a recent unpleasant dining experience is Mrs Audrey Soh, 34, who teaches pilates. Dining at a new restaurant on Sentosa on Valentine's Day, she says it took more than 20 minutes for her and her husband just to catch a server's attention to take their orders.

The celebratory meal turned into a frustrating one.

She says: "I felt as if there was just too much happening in the kitchen. The staff were so busy serving food to tables that they forgot about the new customers."

Extended waiting times for food and service at under-staffed restaurants are also another gripe, but some customers remain understanding.

Bank employee Alex Quek, 31, who has dined at sharing plates eatery Morsels in Mayo Street several times, says: "Waiting time for food there is, at times, twice as long as at other restaurants, but I think it is worth it because the food is made from scratch and tastes good, as opposed to being pre-prepared."

Housewife and mother of two young children Anne Lim, 36, says she was close to "tearing her hair out" when she had to wait 20 minutes for her bill earlier this month at a casual Western chain, but says she empathises with staff.

She says: "My kids were whining and wanted to go home. But it is hard to blame the restaurant when you see only a handful of staff already stretched to full capacity, and a manager walking around the restaurant briskly with beads of sweat on his brow.

"I feel sorry for them - it must be stressful working in an environment where everyone demands your attention."

She adds that service from grouchy workers who are snappy and disgruntled can also mar the dining experience. That happens sometimes, restaurateurs say with regret, because when restaurants are short of staff, existing ones take on longer shifts to alleviate the situation and become over-worked and tired in the process.

To manage the labour crunch, what some restaurants such as Vietnamese noodle chain Nam Nam and casual Japanese restaurant Ichiban Boshi end up doing during peak periods is limit the number of diners who enter their restaurants.

A queue forms outside the restaurant and customers wonder why they are standing in line when there are empty seats in the restaurant.

Ms Winnie Loo, 37, senior marketing communications manager of RE&S Enterprises, which owns Ichiban Boshi, says: "We are sorry that our customers may have to wait during peak times due to the staff shortage. As we want to maintain higher standards, we do not want to compromise this by rushing our staff which would let our customers down."

Indeed, restaurateurs are more than aware of the effect the lack of service staff has on patrons, and it saddens them because a restaurant sells more than just food - it offers a dining experience.

Mr Olivier Bendel, 40, chief executive of the Deliciae group, says: "I feel bad. Pleasing people is our main goal - it is about good food and good service."

He has stepped in countless times to serve guests and clear tables at his restaurants, which include French steak and fries restaurant L'Entrecote in Duxton Hill.

Mr Bendel is certainly not the only boss serving customers because restaurants are short handed.

Last August, owners and investors of Uma Uma Ramen at Forum The Shopping Mall had to roll up their sleeves for weeks until they could find more staff, while owners and shareholders of Lolla in Ann Siang Hill had to wash dishes at night for several weeks despite having day jobs when the restaurant first opened last September.

Over at Chui Huay Lim Teochew Cuisine restaurant in Newton, Mr Ang Kiam Meng, chief executive of the Jumbo group, which runs the restaurant, as well as other top-level management staff helped out with service over the first two days of Chinese New Year because the restaurant needed extra hands.

They say they have no qualms doing it but add their pitching in does not solve their manpower issue in the long term.

With the opening of more restaurants, restaurateurs worry that they will not be able to find enough staff to fill new positions, which may then affect the quality of service.

Recruitment has become so competitive, with restaurateurs desperate to attract more staff ahead of scheduled openings, that some are even going beyond conventional advertising to hire the help they need.

The Spa Esprit Group, which owns eateries such as Skinny Pizza and Tiong Bahru Bakery, will be hosting a recruitment party with a free flow of food and drinks next Thursday night hoping to attract 200 staff for its six to eight new restaurants this year.

Its managing director and founder Cynthia Chua, 41, says: "It is really, really difficult to get local staff. Traditional methods of recruitment often see 100 foreign applicants and perhaps just three locals."

She adds that very often, when interviews are scheduled with local applicants, none show up, a scenario many restaurateurs, including Lolla's managing director Pang Hian Tee, have experienced.

PRICIER FOOD

Higher operating costs that include increased labour costs, rising rentals and the increasing costs of ingredients, have also led to higher prices of food for diners.

Restaurateurs say overall costs have gone up at least 20 to 30 per cent over the last year, and they have little choice but to pass on some of it to consumers.

Some of the restaurateurs SundayLife! spoke to admit raising prices by about 5 to 10 per cent and absorbing the rest. They say it is not possible to raise prices by too much in a competitive restaurant environment as customers will go elsewhere.

For example, TungLok Group's executive chairman Andrew Tjioe says menu prices, in some cases, are up about 10 per cent, but the group tries to streamline processes such as producing more items such as stocks and marinades in the central kitchen to keep costs down.

To attract and retain talent, many restaurants have resorted to offering higher salaries. Starting pay for service staff with little or no F&B experience or training can go as high as $2,000, depending on the employer. This is about $800 to $1,000 higher than two years ago, restaurateurs say.

They are also increasing salaries of current employees to keep them from crossing over to competitors.

Ms Bernadette Wong, 27, spokesman for Creative Eateries, which runs Bangkok Jam and Boston Seafood Shack among other restaurants, says: "We would rather pay to retain our good staff, than lose them and train new staff from scratch. Therefore, on average, salaries will increase between $500 and $1000 each worker depending on the level."

And when workers leave, more time needs to be spent on training new employees, which is a hidden cost. This process can affect service standards and also be disruptive to productivity flow.

Other increases in manpower costs also stem from increased foreign worker levies and increases in application, issuance and renewal fees for work passes.

CHANGING DINING EXPERIENCE

If manpower issues continue to plague restaurants here, diners may have to adapt to new and less familiar dining experiences.

For one thing, interactive menus in the form of iPads, tablets and iPod touches might become the norm rather than a novelty.

These help businesses reduce reliance on manpower as well as streamline orders, which can be sent directly to kitchens from the devices.

Already, restaurants such as sushi eatery Genki Sushi (right) and Indian restaurant Gayatri are using such devices, while groups such as Lo & Behold will be introducing them soon.

Also, diners may have to get used to more self- service restaurants. Creative Eateries' self-service eatery Boston Seafood Shack at The Star Vista in Buona Vista was specifically conceptualised with the manpower crunch in mind. Diners order at the counter and are then presented with a buzzer that notifies them when food is ready for collection.

Most of all, diners here, restaurateurs say, will need to learn to be a little more understanding and gracious when it comes to waiting times for food and service.

However, diners such as Ms Lim worry that if customers become overly understanding, their graciousness might be taken for granted.

She says: "I understand the situation, but at the same time, I don't want slow service to perpetuate. If restaurants think it is okay for diners to have slow or bad service, then what is the point of dining at a restaurant and paying for it? I might as well have fast food."

However, conditioning diner mindsets on what to expect here, if possible, will be a gradual process, restaurateurs say. But they also express concern over how Singapore is to keep up with other international cities on the service front.

Spa Esprit Group's Ms Chua says: "It will be very difficult for Singapore to compete internationally as a gastronomic city.

"People are more demanding as to how they spend their dollar these days. If the reputation for poor service in Singapore becomes ingrained in the mindset of travellers, it will take a long time to reverse it."

Casual eatery Morsels has been open only two months and already, two cooks have left and its restaurant manager has quit.

The restaurant now has one full-time service staff member and three part-timers, of whom, one is a cook who starts working in the kitchen only at dinner time, after service has begun.

"We definitely need more help," says Ms Loh of her 40-seat restaurant, located on the fringe of Little India.

It offers dishes such as scallop ceviche, squid ink risotto with salted egg sauce and grilled octopus and sweet clams in a milky and flavoursome fig and kim chi broth.

The two are culinary school graduates. Mr Chia attended the Culinary Institute of America in Greystone, Napa Valley, while Ms Loh went to the California Culinary Academy - Le Cordon Bleu in San Francisco.

Restaurants they have worked in include Mosimann's in London, Bouchon in Yountville in the Napa Valley and Spruce in San Francisco, all of which are run by famed Michelin-starred chefs, as well as other popular restaurants such as Delfina in San Francisco and Oenotri Restaurant in Napa.

And in those restaurants, and others they have dined at, staffing never seemed to be a problem.

Ms Loh says: "In San Francisco, for example, it did not seem hard to hire - the restaurants always had staff in the kitchen. Over there, there are plenty of locals who want do the job. In Singapore, we don't have enough locals who want to do the job, yet the Goverment still sets a foreign worker quota."

She adds that on the service front in the United States, staff work hard for tips, so the lack of service staff has never been an issue.

They had heard stories about the food and beverage industry's tough manpower situation here, but still decided to go ahead with their dream of running an eatery, because they thought that, as chef-owners, they would not be held ransom to chefs leaving or not having enough waitstaff.

Still, the situation is proving to be challenging.

For now, it is just Mr Chia and Ms Loh who prepare all the ingredients, stocks and sauces from scratch, in time for dinner service.

Ms Loh says: "I hope this doesn't have to be compromised as it is fairly time consuming."

Mr Chia runs the kitchen and cooks the food during service, while Ms Loh handles the orders, prepares salads and the ceviche, and adds the final touches to dishes.

So, when one of them falls ill, it gets tough. In fact, just last week, Ms Loh had a migraine but could not afford to rest.

Operations in the kitchen could go further south. Diners might have to wait longer for food, for instance, should one of them becomes too sick to work.

Ideally, she says, the restaurant needs at least three more kitchen staff: a cook to help with preparations and two line cooks.

The couple thinks the restaurant will be able to manage with the lean service staff team it already has, provided the staff they have turn up for work.

Morsels is open for only dinner but there are plans to open for lunch on Saturdays, if they can find the staff. There are no plans to open for lunch on weekdays.

On the manpower crunch, Ms Loh says: "Our kitchen won't shut down because both of us can cook, but that being said, it means we will be working longer hours than we already are."

As it is, they get to the restaurant in mid-morning after going to the market to shop for ingredients, and do not leave until about 2am.

She says that labour-intensive dishes, such as the tomato tofu salad, where the grape and cherry tomatoes need to be scored, blanched and iced before the skin is removed, might have to be taken off the menu because of the manpower crunch.

And if the situation does not improve, they may need ramp up the preparation processes by using their combi-oven and sous vide machine more extensively. For example, the grilled beef may not be cooked to order in the future. It may have to be cooked sous vide ahead of time, and seared on the grill just before it is served.

Also, with longer hours spent on preparation, the duo may not be able to change their menu every eight weeks, as they had planned, as more time spent on preparation means less time for creating new dishes. They say that at this rate, they will also not be able to add new dishes to their existing menu.

New staff can also affect service time and consistency, they add.

Ms Loh says: "The food might come out slower than usual. Also, with the high staff turnover, it is hard to keep quality consistent so it is more work for us to train and retrain."

Customers at Morsels have been "fairly understanding" so far.

On two occasions, diners have had to wait about 30 minutes for food, but Ms Loh says they were "nice about it".

She adds: "We train our servers to make sure they let the kitchen know when to fire up the food.

"But it helps to let our customers understand the situation, and we throw in some munchies so that they can keep busy while they wait for their food."

To cope with the manpower shortage, the TungLok Group closed its casual restaurant Lao Beijing at Tiong Bahru Plaza last December.

A sign on the shutters reads: "We regret to inform that Lao Beijing at Tiong Bahru Plaza will cease operations with effect from Dec 26 due to severe manpower shortage."

Diners after the chain's Northern Chinese cuisine now have to head to Lao Beijing's three other outlets.

The restaurant at Tiong Bahru Plaza still had another four months left on its lease, but Mr Tjioe and his team did the calculations and says it made more sense to close the restaurant and re-deploy the 16 staff to his other restaurants.

Part of the reason he is not renewing the lease there is due to a lack of manpower. Other factors include rising rentals.

He says: "It was a trade-off - we did the sums. It was better to pull the staff over so that we would be able tooperate our new restaurants TungLok Xihe and Modern Asian Diner at The Grandstand than to continue at Tiong Bahru Plaza. So I decided to close."

The average spend at Lao Beijing there was about $20 to $25 a person, but at the two new mid- to upper-mid-tiered restaurants, the average cheque is about $30 to $35 for lunch, and $50 to $55 for dinner.

The TungLok Group operates on "a skeleton workforce", says Mr Tjioe.

Even with the group's 700-strong workforce, which is equally split between kitchen and service staff, it is still about 20 per cent short of staff.

And when the Ministry of Manpower's revised dependency ratio ceiling kicks in next year, the group may find itself with about 30 foreigners too many if it does not ramp up the hiring of Singaporeans.

But that is proving to be a challenge.

This year, the plan is to consolidate and strengthen the running of existing outlets, focus on its catering arm and plan for overseas expansion in cities such as Jakarta and Beijing. The group has one restaurant in Beijing and three in Jakarta.

He does not face the same manpower issues overseas as he does here. He says: "As long as you are willing to pay, you will get the manpower you need."

In Singapore, he adds, it is a different story. The starting pay for service staff without experience is $1,800, by far one of the highest in the market. Recently, the company received 20 applications from Singaporeans, but only one person took up the position.

"The problem is choking," Mr Tjioe says of the manpower crunch in the restaurant scene. "We have been doing business overseas anyway but perhaps now, that is the way to go - to spend more time exploring overseas markets than wasting time here.

"I will not be opening any more restaurants for a while. I have to stop, not because there are no opportunities but primarily because of the labour shortage. The market can definitely afford to have more restaurants."

The company has already spent about $2 million to $3 million on machines over the last two years to help with automation to reduce the reliance on manpower at restaurants.

For example, TungLok's popular pork shank, which is available at many of its restaurants, is marinated in bulk at the group's 20,000 sq ft central kitchen in Bukit Batok. In fact, Mr Tjioe says, for some items such as the pork shank, preparing them in bulk adds to intensity of flavour to the dish.

Aside from machines for sauces and marinades, he also has one that can make superior stock in one hour, as opposed to the usual eight hours it would take to prepare it at an outlet.

While technological advancements and machines such as these aid productivity, he insists that it is not always achieved through these means.

"When you have more manpower, you can send some staff for training and they can take turns. You will then have much better quality staff in the long run," he says, adding that well-trained staff lead to better efficiency and more sales.

But he says, sending staff for training can be tough "when you are tight on manpower".

Profits are also shrinking, with manpower and rental and the costs of ingredients on the rise. But these costs cannot be passed on in full to customers, because of the competitive restaurant market.

A whole fried chicken, Mr Tjioe gives as an example, typically costs $40 at most Chinese restaurants, and if a restaurant is to increase this price, diners will go elsewhere for the same dish.

What can be done, he says, is to create different "value-added" dishes by adding additional ingredients so that the dish changes into something new and a higher price may be warranted.

Chinese restaurants also function differently from Western ones in terms of culture. Meals typically call for more plate changes and more frequent topping up of small tea cups, and for managers to mingle with diners, offering a more personalised service.

He adds: "We are not just competing locally, we are also competing on an international level.

"When those who have been served in Chinese restaurants in Hong Kong, Shanghai and Taipei come to Singapore, they expect exactly the same experience, and we cannot be too far off."